Print Story WaMu lending standards as Dadaist performance art
By chuckles (Sat Dec 27, 2008 at 06:06:06 PM EST) (all tags)
NY Times:
As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.

Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.


On one loan application in 2005, a borrower identified himself as a gardener and listed his monthly income at $12,000, Ms. Zaback recalled. She could not verify his business license, so she took the file to her boss, Mr. Parsons.

He used the mariachi singer as inspiration: a photo of the borrower’s truck emblazoned with the name of his landscaping business went into the file. Approved.

The Power of "Sí, se puede"!
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WaMu lending standards as Dadaist performance art | 8 comments (8 topical, 0 hidden)
Good point, but that advert by johnny (3.00 / 4) #1 Sat Dec 27, 2008 at 06:33:53 PM EST
says nothing about WAMU'S lending standards. It's about their checking accounts.

The implied racism of that advert is kinda cringeworthy: the hip young black dude being so superior to the dodgey old white banker dudes. Makes one want to avert one's eyes, it does.

But it's all theatre, of course, and paid for by those same white dudes lampooned in the ad. When the house of cards collapsed, the white dudes in power came to the rescue of the white dudes in danger, to the tune of $700,000,000,000.00 and counting. It's easy to laugh at yourself when the government is cramming $100 bills into your every pocket, not to mention into your trunk, glovebox, back seat, and into every one of the 23 closets in your vacation home.

I wonder where that Negro guy is today?
Buy my books, dammit!

'I wonder where that Negro guy is today?' by chuckles (4.00 / 5) #2 Sat Dec 27, 2008 at 06:48:56 PM EST

"The one absolutely certain way of bringing this nation to ruin [...] would be to permit it to become a tangle of squabbling nationalities"
[ Parent ]
wassup by georgeha (4.00 / 2) #4 Sun Dec 28, 2008 at 05:29:42 AM EST

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I think it has been established by dark nowhere (3.00 / 4) #3 Sat Dec 27, 2008 at 09:12:47 PM EST
that old white guys are ugly and young black ones are... not. It's hard to fault them for that even if it seems racist. That, and the English speaking world has a perception that old white guys have more power/money than sense or goodwill. It's not inherently racist to think that. I found the play on it kind of amusing.

See you, space cowboy.

[ Parent ]
True, the commercial was about checking accounts by chuckles (2.00 / 0) #5 Sun Dec 28, 2008 at 02:29:31 PM EST
But the commercial was part of a larger effort by WaMu to distance itself from stodgy, old (white?) banking standards, such as those still practiced by most credit unions and many local banks. WaMu, along with many of the really big, nationwide banks, was successful in this effort of embracing new definitions of "responsibility" and "solvency".

"The one absolutely certain way of bringing this nation to ruin [...] would be to permit it to become a tangle of squabbling nationalities"
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Darned old bankers by duxup (4.00 / 2) #6 Sun Dec 28, 2008 at 06:20:55 PM EST
My father in law started a bank way back in the day.  It grew slowly and it is still around.  He looks like Mr. Magoo.  His bank is still operating just fine and paying out dividends to stock holders.  We were chatting one day and he explained why they rarely foreclose on anyone.  We're not a big bank, and when I started banking foreclosures made people think your bank was cruel or not doing it's job right, and then the people in those towns wouldn't do business with you.  So we don't loan money to people who might get foreclosed on. 

Parallels by Herring (4.00 / 3) #7 Mon Dec 29, 2008 at 12:33:55 AM EST
Dot Com bubble: "Concepts like profitability and P/E ratio no longer apply"
Recent property fuckup: "Concepts like 'ability to repay' no longer apply"

Seems like every few years a bunch genii think they've repealed the financial laws of physics and the greed-driven masses believe them. Then it all fucks up. If it weren't for the amount of collateral damage, it would be comic.

You can't inspire people with facts
- Small Gods

There is a bit in the WaPo by wumpus (2.00 / 0) #8 Mon Dec 29, 2008 at 02:23:58 PM EST
about AIG's fall. Something about brilliant Risk analysis software. While there are claims on this site about the complete lack of such software, I maintain that it doesn't make a whole lot of difference if you are handing out bonuses based on how much you reduced what the risk parameters are (if a hurricane costs $nGigaBucks, we can increase profit by nearly $nGigaBucks by assuming one less hurricane...).


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WaMu lending standards as Dadaist performance art | 8 comments (8 topical, 0 hidden)